CALGARY, ALBERTA--(Marketwire - Sept. 22, 2008) - Pearl Exploration and Production Ltd. ("Pearl" or the "Company") (TSX:PXX)(FIRST NORTH:PXXS) is pleased to provide the following operational and financial update.
Heavy oil is becoming an increasingly important component of world oil supply and Pearl has positioned itself strategically to take advantage of this shift. With a diverse portfolio of projects in heavy oil basins ranging from south-western Texas to northern Alberta, Pearl has taken advantage of low entry costs to acquire significant heavy oil resources. The use of enhanced and unconventional recovery techniques such as cyclic steam stimulation (CSS) and Steam-Assisted Gravity Drainage (SAGD), and water and polymer flooding are seen as keys to unlocking the value of these resources. Pearl is currently in the early stages of enhanced recovery pilot programs at several of the Company's fields. Successful pilots and ultimately initial development programs will prove the technical and commercial viability of our heavy oil assets and create substantial value for Pearl by converting significant portions of our large resource base into reserves.
Operational Highlights
Mooney
Work continues on the advancement of the polymer flood pilot at Mooney with preliminary results from the pilot are still expected by Q1 2009. Plans for a field wide polymer flood implementation are expected to be finalized by Q2 2009 with implementation targeted as early as the end of 2009. The implementation of the waterflood continues with its initiation expected in Q4 2008 and continuing into the first half of 2009. In addition, work is underway on an increased delineation and development drilling program to extend the productive area to the west of the main field with the goals of increasing production and proven and probable reserves. We have recently installed an amine plant in Mooney to remove excess CO2 from our gas stream to allow us to ship to market without interruption to service due to non-spec gas. Due to this non-spec gas, production at Mooney was cut back for nine weeks beginning at the end of June by approximately 700 Boe/d, the majority of which is now back on production at this time. In September, Pearl also acquired a further six sections of prospective land to the east of the Mooney main field.
Onion Lake
In Onion Lake our Cyclic Steam Stimulation (CSS) thermal pilot continues to show promising results. We completed the first production cycle on the first well earlier this month and results were significantly above our modeled expectations. Our second well began its first steam cycle on June 20th and its first production cycle on August 11th. Production from the second well experienced some operational issues and as such we are making adjustments to our operating procedures to optimize the pilot as we progress through the second and third cycles of the pilot. The first well is expected to begin its second steam cycle later this week.
San Miguel
At San Miguel, steam injection at the Steam Assisted Gravity Drainage (SAGD) pilot located within the Chittim "B" Field continues as expected. Temperature and pressure monitoring of the well pair indicates that the wells have entered SAGD mode and preliminary results are encouraging.
At Saner Ranch, pilot facility construction is proceeding on schedule with all major long lead items on site and mechanical completion expected to be completed in November.
